Asia equities higher after Middle East tension eases


Friday 03.25 BST

What you need to know

  • Japanese equities climb to 4-week high
  • Hong Kong intervenes to support currency
  • Oil prices ease

Overview

Asia-Pacific stocks tracked Wall Street higher after Donald Trump toned down his rhetoric on the timing of any missile attack on Syria.

Hot topic

Japan’s Topix index was up 0.8 per cent at a four-week high with the industrials sector climbing 1.3 per cent and technology up 1.1 per cent. Uniqlo owner Fast Retailing rose as much as 3.5 per cent to a 10-week high after it upped its full-year profit outlook.

In Australia, the S&P/ASX 200 was on course to snap a two-day losing streak, up 0.4 per cent. Australian-listed shares in New Zealand’s Fletcher Building jumped 10 per cent on a report in the Sydney Morning Herald that Wesfarmers had bought a 3 to 4 per cent stake in the company and was eyeing a takeover bid.

The Hang Seng index in Hong Kong was up 0.4 per cent and heading for its highest close in three weeks, despite a 1.2 per cent fall for technology stocks. The Hang Seng China Enterprises index of Hong Kong-listed mainland Chinese stocks gained 0.5 per cent. The CSI 300 index of Shanghai and Shenzhen stocks rose 0.5 per cent.

South Korea’s Kospi climbed 0.6 per cent.

The White House said on Thursday that the president had spoken to the leaders of France and the UK over potential military strikes on Syria. Mr Trump tweeted on Thursday that he had “[never] said when an attack on Syria would take place. Could be very soon or not so soon at all!”

Overnight on Wall Street, the S&P 500 closed 0.8 per cent higher while the Dow Jones Industrial Average gained 1.2 per cent and the tech-heavy Nasdaq Composite ended 1 per cent higher.

Forex

The dollar index, a measure of the greenback against a basket of peers, was 0.1 per cent stronger while the yen dipped 0.1 per cent to ¥107.40 as concerns over the Middle East eased. The pound weakened a touch to $1.4235 and the euro was unchanged at $1.2324.

The Hong Kong dollar was trading at HK$7.8497 after the city’s de facto central bank was forced to intervene to support the currency after it fell to the lower end of its permitted trading band, hitting a fresh 34-year low.

The move marked the first intervention by the Hong Kong Monetary Authority since the current HK$7.75 to HK$7.85 trading band was introduced in 2005 and it intervened for a second time on Friday morning.

Fixed income

The yield on the 10-year US Treasury rose 2 basis points to 2.817 per cent while that for equal-maturity Japanese government was flat at 0.03 per cent.

Commodities

Oil prices eased, with Brent crude down 0.4 per cent at $71.74 a barrel after climbing above $73 a barrel on Wednesday to its highest in almost four years, over concerns about Syria and reports that Saudi Arabia had intercepted a rocket above Riyadh. US marker West Texas Intermediate was off 0.4 per cent at $66.82 a barrel.

Gold rose 0.3 per cent to $1,339.5 an ounce.

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